Canada Election Odds: Betting Value In The Great White North

Posted By Evan Scrimshaw on September 14, 2021

On September 20th, the Canadian election is taking place, with what was widely being expected to be a sleepy campaign now turning lively after a series of wild polls created a sense of Conservative hope. Canada election odds, once thought a formality for the incumbent Liberals, is now considered competitive, with one widely respected analyst calling it a tossup.

The question is, where’s the value in PredictIt bets?

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Who Will Win?

There are three PredictIt markets for this election – Conservative seats, Liberal seats, and who will be Prime Minister on October 30th. The last one of those – the “Who Will Win” market – is the one that’s the most straightforward – it will be Justin Trudeau.

Canada Election Odds: Who will be prime minister of Canada on Oct. 31?

CandidatePredictit PriceEquivalent Odds
Justin Trudeau$0.84-525
Erin O'Toole$0.16+525

Prime Minister Race Analysis

The thing about Canadian elections is there are more than two parties, and so long as the third party – the left-wing New Democratic Party (NDP) – and the Liberals have the bare majority of 170 seats between them, Justin Trudeau will remain Prime Minister.

In 2019, the NDP were explicit in saying they would never put up a Tory government if no party won a majority, and while they have been slightly less explicit this year, there is no prospect of the NDP picking the Conservatives over the Liberals.

The Liberals and NDP added up to 181 seats in the last Parliament, and the Liberals survived easily. Two of the leading seat projection sites have the combined Liberal-NDP total well above the 181 they won combined last time, as well as projections I run myself. The NDP are up since the last election, and the Liberals are down slightly nationally, but they’re maintaining their seat lead over the Conservatives.

Put another way, Justin Trudeau would survive a polling miss above the norm for a Canadian election, in the way that while Joe Biden did not win as big an election victory as many thought he would based on the US presidential election polls, he did have the slack in the polls to survive a huge polling miss and still win. Trudeau does not have as much slack as Biden did on November 2nd, but he does have a considerable amount.

Additionally, the Tories have always had a path to government that didn’t make sense – either huge swings in Ontario, which would be atypical of the recent history in Ontario, or even bigger swings in historically Liberal Atlantic Canada, which some polls showed, and now don’t. I’ve said the entire time I cannot see a path to a Tory government, and I can’t find it. Trudeau at 80 cents is not a great price, I’m aware, but he is not going to lose this election. It plainly will not happen.

More political betting markets from Evan Scrimshaw 

Canada Election Odds: How many seats will the Liberals win?

SeatsPredictit PriceEquivalent Odds
149 or fewer$0.26+285
190 or more$0.01+9900

Liberal Seats Analysis

This is a slightly more complicated exercise, because of the narrow bands available here, but the very low odds points makes betting multiple bands still potentially profitable.

Here’s a past example of this strategy. There was a primary in 2020, the Ilhan Omar primary in Minnesota, where the implied Omar margin of victory was 27%, and that seemed high. I wasn’t sure which of the smaller bands would hit, but betting a few of those and just hoping it came within one of them was the bet – and it paid off that night. The same principle applies here.

The Liberals won 157 seats last time, and it is likely they will win more than that this time. If you bet the 160-164, 165-169, and 170-174 bands together, you’re buying the Liberals to gain between 3 and 17 seats net at 33 cents (roughly +200 odds). Thought about holistically, that’s a very profitable range to bet the Liberals in.

Everything would need to break right for them to get to 174, and I do mean everything – they’d need to hold everything they have in Ontario and Atlantic Canada, make a dozen gains in Quebec, and get every gain in BC they could plausibly get. That’s theoretically possible, but lining all of that up in the same night is extraordinarily difficult.

On the other end, however, Liberal losses on net are also very hard to find, because they have seats in BC, Alberta, and Quebec that they can go get to offset some small losses in Ontario and Atlantic Canada. The likeliest outcome is something between 160 and 170, and there is some small insurance on the notion they get over the majority line. If you wanted to tack on the 175-179 line, you’d be changing your total bet to net 39 cents, and that would be a perfectly reasonable proposition.

Canada Election Odds: How many seats will the Conservatives win?

SeatsPredictit PriceEquivalent Odds
109 or fewer$0.18+450
150 or more$0.12+700

Conservative Seats Analysis

In the same way we find value in a broader range of bands, I have written that the Tories are likely to lose seats from the 121 they won at the last election. 115-119, 110-114, and 109 or Fewer would be a collective 35 cents (roughly +180 odds equivalent) for an outcome that is more likely than not to happen.

The Conservatives are not going to make notable gains in the six Eastern provinces, and there are at least a dozen losable seats in the four western provinces for them, in addition to seats they could lose in Ontario to the NDP. Various forecasts have them down since the last election in recent days, and it is likely they will stay there.

Their lack of path forward mentioned earlier means they don’t have a lot of seats they can go win to offset their expected losses in the west.

Final Thoughts

As much as this election has been more exciting than many expected it to be, the result is what was expected when the election was called.

The Liberals will win again, but it’s unclear if they’ll win the majority government they desire or not. The Tories are nowhere to be seen and likely to go backwards, and Justin Trudeau will stay as Prime Minister. It might be boring to be in the same place it was when the campaign started, but the value is here now, with the opportunity to take advantage of it.

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